Why RDC: Aren’t Checks Dead?

A new white paper examines the increasing adoption of remote deposit capture.

Remote deposit capture (RDC) will be an in-demand service for the foreseeable future, according to a white paper from the CUNA Technology Council. RDC allows check holders to scan and use the front and back images of checks as “substitute checks” for electronic clearing—eliminating the need for banks to present paper checks to each other.

While check use has declined significantly with the increased use of debit cards, direct deposit, and online bill pay, people still prefer to use checks for some purposes. Checks are safer than large amounts of cash in a wallet or stashed inside the house. And checks allow easy tracking of random payments when a card reader or electronic payment method isn’t available.

RDC, notes the white paper, is a valuable tool for credit union members who:

Reside far from a branch;

Frequently travel or are stationed in other countries;

Have college-age children who live far from a branch;

Wish or need to make deposits during nonbusiness hours; or

Operate businesses that must make frequent check deposits.

Convenience is a key factor in increasing RDC adoption, according to the white paper. RDC can be marketed to a broad target group, and promises convenience and freedom for members under time pressures. Rather than hanging on to checks until they can get to a branch or an ATM, they can make deposits right away and have access to the funds.

Evidence of RDC adoption using home-based scanners is starting to emerge. In the first month of the release of USAA’s Deposit@Home application, more than 125,000 were downloaded from the iTunes App Store, resulting in more than 10,000 new users, according to Celent.

The NCUA’s final field-of-membership rule was published Wednesday, making it effective Feb. 6. The rule, finalized by the NCUA board in October, facilitates consumer access to credit unions and provides credit unions with more flexibility.